Key Takeaways:
FMC Corp. reported Q2 adjusted earnings of $0.26 a share, topping the $0.21 consensus by 24%, though revenue missed estimates.
"During the quarter, we completed several important actions that strengthened FMC's financial foundation and provide greater flexibility to execute our strategy," Pierre Brondeau, chairman and chief executive officer, said.
Revenue of $867 million fell 17% from a year earlier, missing the Zacks Consensus Estimate by 7%. Excluding the company's India business — which FMC agreed to sell for $252 million — revenue was $841 million, down 20%. Adjusted EBITDA of $153 million declined 26% year over year. Volumes dropped 10% on lower diamide partner orders and reduced demand for legacy products, while price declined 7%.
FMC shares have lost 21% year to date, trailing the S&P 500's 8.5% gain. The company now expects full-year adjusted EPS of $1.19 to $1.49, down 55% at the midpoint, and revenue of $3.50 billion to $3.70 billion.
The earnings beat marked the third time in four quarters that FMC surpassed consensus EPS estimates. A quarter earlier, the company reported a narrower-than-expected loss of $0.23 a share versus expectations for a $0.39 loss.
FMC during the quarter secured roughly $1 billion in proceeds for debt reduction, including a $200 million upfront licensing payment from Corteva for the rimisoxafen active ingredient, a $114 million sale-leaseback of its Newark, Delaware property, and a $400 million equity investment from Tessenderlo Group. The India commercial business sale to Crystal Crop Protection Ltd. is expected to close later this year.
The company's growth portfolio — new active ingredients and Cyazypyr — grew mid-single digits, offsetting weakness in Plant Health. Branded sales of Rynaxypyr were essentially flat excluding India, supported by demand for new formulations.
FMC expects a return to year-over-year growth in the fourth quarter, with revenue of $1.06 billion to $1.20 billion and adjusted EBITDA of $275 million to $315 million. The third quarter is expected to be the trough, with adjusted EPS of $0.05 to $0.13.
The lowered guidance and ongoing restructuring — including $139.5 million in charges tied to Project Foundation — signal management expects a prolonged recovery in the agricultural chemicals market. Investors will watch the Q3 earnings call for signs that the fourth-quarter rebound is on track.
This article is for informational purposes only and does not constitute investment advice.
